SEC approves MREIT’s P13B property-for-shares swap

On Friday, the SEC approved the P13 billion property-for-shares swap between MREIT [MREIT 13.70 ?0.4%; 85% avgVol] and Megaworld [MEG 2.17 ?0.9%; 50% avgVol], its sponsor/parent company. The transaction valued the primary MREIT shares at P14.20/share, which is a 3.6% premium to its closing price on Friday, and it brings MEG’s ownership interest in MREIT up to 63.44% from 51.33%. MREIT’s board approved the injection back in May; at that time, the transaction price was almost at an 11.5% premium. 

MB BOTTOM-LINE:  Quick movement from board approval to SEC approval is good for everybody. MREIT shareholders should cheer anything that increases the per-share dividend, but this transaction is only just office towers, and those are probably the weakest thing that MEG could have passed down considering the state of the commercial office market and its outlook. Still, we shouldn’t let perfect be the enemy of good. If we consider asset injections like “eating” for REITs, then this “meal” would be one that is almost instantly forgotten. The kind of meal that would only catch your attention if you missed it and became hungry. Just don’t make eye contact with the empty-handed DDMPR shareholders watching you eat. Count your blessings!

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